Oh this is a scream. This is funny. AIG is saying that it is forced, forced I tell you, to pay 100 million smackaroos in retention bonuses to executives in the very division that wrote all those credit default swaps and brought AIG to the brink of total collapse.
To add insult to injury. AIG cut bonuses to other divisions that didn’t do anything wrong. Irony volcano erupting here:
The second group of bonuses covers some 2008 retention payments from contracts entered into before government involvement in A.I.G. Indeed, in his letter to Mr. Geithner, Mr. Liddy wrote that he had shown the details of the $450 million bonus pool to outside lawyers and been told that A.I.G. had no choice but to follow through with the payment schedule.
I don’t believe this crap about outside lawyers saying they are obligated to pay. If AIG did not pay the bonuses and the employees sued–tell me, where in the world would you find a jury that would vote in favor of the plaintiffs?
Further, these things are "bonuses" not salary. Words have meaning, even in law. If they are "retention bonuses," you are only contractually required to pay them if you want the executives to be contractually obligated to stay in your employ.
Here’s an idea for you, don’t pay the retention bonus and DARE them to walk. Nobody else is going to want to hire them in the near future. In fact, don’t pay them the bonus and tell them if they don’t want to be laid off, they will renegotiate their deals to change the terms of both performance bonuses and retention payments.
See, problem solved. I should be Treasury Secretary.
(graphic by twolf1)
Sign the petition to Congress: No More Dough Til We Know Where It Goes.